El Cajon Scam

Now investors are complaining that the securities agency, the court, and the receiver are moving too slowly and not getting money back to investors. Through March 31, receiver Donell had taken in $2.6 million, spent $409,000 for lawyers, forensic accountants, and the like, leaving $2.2 million. That’s not much out of a total of $30 million, but tracing and recovering scam money is a tedious process. And there is always the big question: can either La Madrid or Lopez actually pay? Has the money vanished because of putrid investing — or is it reposing elsewhere? Donell may not have recovered much money because it is gone.

“I don’t know what these legal people do,” says San Diegan Ron Nieraeth. “The receiver has $2.2 million. Why can’t he start distributing it, even if it’s only 20 cents on the dollar?” Donell says much depends on funds due from Lopez. Claims processing will have to wait until the Lopez criminal trial is over. “There will be no initial distribution [of money to investors] before six months at the very earliest,” says Donell.

“I can’t believe the courts have taken so long to do something about it,” says Diana O’Grady of Menifee in southwest Riverside County. “They are as bad as Beau is.” When she got in, “It sounded too good to be true. My husband [now deceased] said to be careful, but I needed the monthly income.”

Do you suppose he found a lawyer as a result of that solicitation?

“I don’t know what these legal people do,” says San Diegan Ron Nieraeth. “The receiver has $2.2 million. Why can’t he start distributing it, even if it’s only 20 cents on the dollar?”

Unless my math is wrong, $2.2 million is not .20 cents on the dollar, it is about .07 cents on the dollar.

Donell says much depends on funds due from Lopez. Claims processing will have to wait until the Lopez criminal trial is over.

I hate to break the bad news-Lopez doesn't have any money-it is gone and that is why he is going to prison.

He made a very big, very stupid mistake-he lied to a federal judge. That is not a wise thing to do. If he didn't have any of the money left he should have been up front with the judge, now he is going to pay the price. And it cold be a big price, as is will La Madrid.

Article doesnt say how old these bums are, but they might see 10-15 years in this scam. They should ask Brent Wilkes for some prison advice.

Response to post #1: A. Nieraeth was saying that off the top of his head. I'm sure he didn't do his arithmetic. I don't fault him on that remark. B. I believe both La Madrid and Lopez lost a bundle by investing poorly. Why Lopez lied to the judge, claiming he would pay, is beyond me. Thus far, officials know that he lost half the $5 million with which he was shorting T paper at just the wrong time. He may have some that he hasn't dissipated. C. La Madrid still has to account for a lot of money -- beyond what he sent to Lopez. Best, Don Bauder

Best, Don Bauder

Response to post #7: Yes, in the process of researching this column, I saw that photo. Would you run a photo of that quality in a print publication? Please. Maybe I should have said "suitable" picture. Best, Don Bauder

Check of county NOD's shows that he had at least 4 Notices of Default on real estate last year with his residence almost foreclosed in October. So much for the real estate guru, I bet a lot of the investor money went into his home mortgage payments ($1.6MM mortgage debt as of October 2008).

Response to post #11: He lived in a posh home in Jamul. He is no longer there. He bragged he had a secret surefire formula for achieving real estate profits, just as he had for beating the stock market. Best, Don Bauder

Response to post #12: Hopefully, the receiver's report will show whether he commingled his real estate and stock market investors' funds, and whether he dissipated those funds on his personal assets, such as his luxurious home. Best, Don Bauder